After days of private conversations with Montgomery County’s unions, public school officials and executive branch leaders, the president of the body that actually makes the county’s billion-dollar decisions signaled the endgame Monday in a months-long struggle over spending.
Council President Valerie Ervin (D-Silver Spring) said all nine members have signed off on a package of cuts to employee benefits and the public school system.
Under the plan, the council would cut $25 million from the $1.4 billion it contributed to the public school system this year. It would also take more control over the way the schools, and other county agencies, save to cover retiree health insurance.
The council would largely direct the school cuts to an account covering employee benefits, said Ervin, a former Board of Education member. The goal, she said, is to keep the cuts from affecting classrooms, while making sure that school employees share in countywide budget cuts.
With an overall budget that tops $2 billion, the school board should be able to find $25 million in cuts “without a whole lot of trouble,” Ervin said. Although the school board decides how to spend its funds, the council has the authority to appropriate money in broad categories.
“We’re going to stay out of any of the categories that impact the classroom. The board will say, ‘That’s not possible.’ We beg to differ,” Ervin said.
Indeed, the reaction from the school system was swift and severe.
“By cutting the education budget even further, the Montgomery County Council is ignoring state law and is, once again, taking state funds meant for the district’s neediest students and using it to balance their side of the budget,” school board President Christopher S. Barclay (Silver Spring) said. “These cuts will seriously damage our efforts to maintain Montgomery County public schools’ reputation as one of the nation’s premier school districts and will ultimately undermine the county’s economic health.”
In March, County Executive Isiah Leggett (D) had proposed keeping local funding for the schools in fiscal 2012 the same as this year. The Leggett proposal was $82 million less than the schools had requested to keep up with rising enrollment.
Ervin said failing to make cuts in school funding would starve other crucial county departments that are facing cuts, including safety-net services, libraries and recreation, among others. There’s also the principle of equity, Ervin said.
For instance, the council is proposing that police, firefighters and other government employees increase their share of health care premiums by 5 percent. (Workers in HMOs would be exempted, to encourage participation in those less-expensive plans.)
The schools could save $7 million by making that same change, according to council figures, and could save $11.7 million more by changing local school pension benefits to reflect recent state pension changes.
School union leaders have argued that their members should not face higher premiums because their setup already encourages employees to participate in the less-expensive HMO option.
Ervin also outlined another key change that would affect the schools and other agencies. The council plans to create a countywide trust to set aside money to cover its multibillion -dollar retiree health liability.
“We’re making a policy change, and we’re going to require county agencies to participate in an account just” to cover retiree health, Ervin said.
The $20 million the schools have budgeted for that purpose would be put in a special holding account while the countywide fund is created, according to the council.
The council wants to create the countywide retiree health trust as a precaution. Council members are concerned that if things are kept as they are — with the schools having their own retiree health fund — school officials could dodge the council’s pressure to cut the benefits of current employees. That’s because the benefits category the council plans to trim includes funds to cover future retiree health costs.
The full council is scheduled to vote on the key parts of its budget Thursday.
“The council has proposed a legislative package and we will know on Thursday whether all nine members who signed off on it earlier will be on board,” Ervin said. “Some things may come up that we’re not anticipating. You have to follow the bouncing ball.”